Correlation Between UNIQA Insurance and Lindsell Train

Can any of the company-specific risk be diversified away by investing in both UNIQA Insurance and Lindsell Train at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UNIQA Insurance and Lindsell Train into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between UNIQA Insurance Group and Lindsell Train Investment, you can compare the effects of market volatilities on UNIQA Insurance and Lindsell Train and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UNIQA Insurance with a short position of Lindsell Train. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIQA Insurance and Lindsell Train.

Diversification Opportunities for UNIQA Insurance and Lindsell Train

0.83

Correlation Coefficient

UNIQA Insurance  Lindsell Train

Very poor diversification

The 3 months correlation between UNIQA and Lindsell is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding UNIQA Insurance Group and Lindsell Train Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsell Train Investment and UNIQA Insurance is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UNIQA Insurance Group are associated (or correlated) with Lindsell Train. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsell Train Investment has no effect on the direction of UNIQA Insurance i.e., UNIQA Insurance and Lindsell Train go up and down completely randomly.

Pair Corralation between UNIQA Insurance and Lindsell Train

Assuming the 90 days trading horizon UNIQA Insurance Group is expected to generate 0.55 times more return on investment than Lindsell Train. However, UNIQA Insurance Group is 1.83 times less risky than Lindsell Train. It trades about 0.05 of its potential returns per unit of risk. Lindsell Train Investment is currently generating about -0.02 per unit of risk. If you would invest  669.00  in UNIQA Insurance Group on October 21, 2024 and sell it today you would earn a total of  132.00  from holding UNIQA Insurance Group or generate 19.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.6%
Values	Daily Returns

UNIQA Insurance Group  vs.  Lindsell Train Investment

UNIQA Insurance Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in UNIQA Insurance Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, UNIQA Insurance may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Lindsell Train Investment

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lindsell Train Investment are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Lindsell Train exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with UNIQA Insurance and Lindsell Train

The main advantage of trading using opposite UNIQA Insurance and Lindsell Train positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIQA Insurance position performs unexpectedly, Lindsell Train can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lindsell Train will offset losses from the drop in Lindsell Train's long position.

The idea behind UNIQA Insurance Group and Lindsell Train Investment pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.